IRS Budget Request Up 6 Percent for '08

President Bush’s 2008 budget has tabbed $11.4 billion for the Internal Revenue Service, a direct appropriation increase of 6.3 percent from the agency’s 2007 budget.

The budget also includes $133 million from reimbursable programs and another $180 million in user fees.

Beginning with the current year’s budget, the agency has realigned its operating appropriations into three new accounts -- taxpayer service, enforcement and operations support -- all of which are designated for increases under the president’s budget. Taxpayer service has proposed funding at $2.1 billion (up nearly $60 million from the president’s 2007 budget), enforcement funding at $4.9 billion (up about $265 million) and operations support at $3.5 billion (up about $250 million).

The operations support line is receiving the largest percentage increase, with a direct appropriation increase of 7.1 percent. Enforcement spending is up 5.7 percent, while taxpayers services is due to receive a 2.7 percent increase. The agency has also requested a separate direct appropriation of $282 million for its ongoing business systems modernization program.

Adjustments to the IRS’s current 2007 budget include efficiency savings of nearly $120 million and the elimination of nearly 1,200 full-time-equivalent positions. The agency also reinvested some $6.5 million in severance pay and support costs for the ramp down of the Philadelphia Processing Center -- although a staff of service and enforcement personnel will stay in the city.

At a macro level, the Treasury said the IRS’s budget request part of the agency’s strategy to improve taxpayer compliance by: